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Department of Revenue: Taxpayers with debt will have to pay collection fees
08/29/2011
SALEM—It used to be that if the Oregon Department of Revenue sent your tax debt to a private collection firm, the department would pay the firm's collection fee.

Not any more.

Beginning October 1, taxpayers will have to pay those fees. The department is sending letters this week to the 200,000 taxpayers with unpaid tax debt to alert them to this change.

Taxpayers can avoid the fees by paying their debt in full before October 1.

When the 2011 Legislature looked at ways the state could save money, it identified this as one. The agency paid $415,000 in collection fees last year.
 
The Department of Revenue doesn't charge collection fees, but does assign penalties and interest to unpaid tax.

Private collection firms may charge up to 42.9 percent of the total debt; however, if it issues a garnishment to collect, it may charge up to nearly 67 percent in fees.

For example, if you have a $100 tax debt with a collection firm, you could end up paying as much as $67 in collection fees.

Oregon law requires the department to send certain debts to private collection firms.

"Even if we haven't sent your debt to a collection firm, we could in the future," said Personal Income Tax Collections Manager Debbie Love-Wagner. "So, if you can pay your debt off now, you could save yourself a lot of money later."

Taxpayers whose debt isn't assigned to a private collection firm may set up a payment plan with the department if they can't afford to pay their debt in full.

You can set up a payment plan online. If you have questions, see the collection fees FAQs.

On our website, you can download tax forms, check the status of your refund, or make payments; or call 1-800-356-4222 toll-free from an Oregon prefix; 503-378-4988 in Salem and outside Oregon; or e-mail us. For TTY (hearing or speech impaired), call 1-800-886-7204.
 
There is a lot of interest in this fee change so callers may experience extended waiting times.